MODINE MANUFACTURING CO 8-K
PositiveGuidanceDeal pendingPreliminary resultsEarnings
Performance Technologies will spin off and merge with Gentherm; Modine retains Climate Solutions and plans to use deal cash to cut debt.
Filed 2026-01-29 17:19 ET
- 1.01 Entry into a Material Agreement
- 7.01 Regulation FD Disclosure
- 9.01 Financial Statements and Exhibits
Summary
Reverse Morris Trust transaction announcement. Modine will spin off its Performance Technologies business and combine it with Gentherm; Modine will receive $210M in cash, subject to adjustment, and Modine shareholders are expected to own about 40% of the combined company, subject to adjustment. Closing is expected in Q4 2026, subject to shareholder, regulatory, financing and tax-related conditions. Modine will retain its Climate Solutions businesses.
Key Figures
| Metric | FY2025 preliminary, revised | Prior outlook (10/23/2025) | Y/Y |
|---|---|---|---|
| Gentherm product revenues | $1.49B-$1.50B | $1.47B-$1.49B | — |
| Gentherm adjusted EBITDA, non-GAAP | $173M-$177M | $175M-$183M | — |
| Gentherm adjusted EBITDA margin, non-GAAP | 11.6%-11.8% | 11.9%-12.3% | — |
- Gentherm cited stronger demand and improved light-vehicle production for the higher revenue outlook; foreign exchange headwinds, customer production shifts and footprint-related expenses offset the revenue benefit for adjusted EBITDA and margin.
- Transaction value: ≈$1.0B, including ≈$790M in Gentherm shares and a $210M cash distribution to Modine, subject to adjustment. The combined company’s pro forma revenue is $2.6B, with a 13% synergy-adjusted adjusted EBITDA margin and ≈1.0x net leverage; the companies identified $25M in annual cost synergies.
- Modine plans to use the cash distribution to reduce debt, with pro forma net leverage expected below 1.0x. Gentherm is expected to be adjusted EPS-accretive by year two after closing; Gentherm owes Modine a $45M termination fee in specified circumstances.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Climate Solutions revenue | FY2026 | Approach $2B | — | — |
| Data Center revenue growth | Next two years | 50%-70% annually | — | — |
| Data Center revenue | FY2028 | Significantly exceed $2B | $2B goal | Raised |
| Combined company adjusted EPS, non-GAAP | Year two after closing | Accretive | — | — |
Investor Takeaways
- Track Gentherm shareholder approval, SpinCo financing, IRS tax ruling and regulatory approvals ahead of the expected Q4 2026 closing.
- Modine’s stated growth case depends in part on Data Center revenue growth of 50%-70% annually over the next two years and exceeding its prior FY2028 $2B revenue goal.
The summary is written by an AI model reading the filing.
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